Time Inc. Increased Fourth Quarter Operating Income from $10 Million
to $122 Million and Increased Fourth Quarter Adjusted OIBDA by 14%
Year-Over-Year—the Highest Rates of Growth in Any Single Quarter Since
Spin-Off in 2014

Time Inc.’s Digital Advertising Revenues Excluding Viant Grew 15%
Year-Over-Year—Sequential Improvement for the Third Quarter in a Row

In December 2016, Time Inc. Joined the Top Ten for the First Time in
U.S. Multi-Platform Unique Digital Audience According to comScore

February 16, 2017 06:00 AM Eastern Standard Time

NEW YORK--(BUSINESS WIRE)--Time Inc. (NYSE:TIME) reported financial results for its fourth quarter
and year ended December 31, 2016.

Time Inc. President and CEO Rich Battista said, "We are pleased with our
progress and achievements during the quarter and our execution against
our plan. In 2017, we are well positioned to accelerate our growth
across digital and other media. Time Inc. is a unique platform in
today’s dynamic media environment. We combine world-renowned content and
iconic brands at massive scale with best-in-class targeting, measurement
and data capabilities, giving us a tremendous value proposition for both
consumers and advertisers. In December, Time Inc. broke into the top ten
for the first time in U.S. multi-platform unique digital audience
according to comScore. We reached nearly 60% of the total U.S. adult
digital audience. In 2016, our digital video experienced explosive
growth, up nearly 150% year-over-year to an all-time high for video
starts at 4.6 billion."

Results Summary

In millions (except per share amounts)

Three Months Ended

Year Ended

December 31,

December 31,

2016

2015

2016

2015

GAAP Measures

Revenues

$

867

$

877

$

3,076

$

3,103

Asset impairments

3

—

192

—

Goodwill impairment

1

—

1

952

Operating income (loss)

122

10

2

(823

)

Net income (loss)

56

17

(48

)

(881

)

Diluted EPS

0.56

0.15

(0.49

)

(8.32

)

Cash provided by (used in) operations

89

27

195

154

Non-GAAP Measures

Adjusted OIBDA

$

182

$

159

$

414

$

440

Adjusted Net income (loss)

73

62

117

125

Adjusted Diluted EPS

0.75

0.58

1.17

1.10

Free cash flow

66

(53

)

94

(58

)

The Company’s Adjusted OIBDA, Adjusted Net income (loss), Adjusted
Diluted EPS and Free cash flow are non-GAAP financial measures. See “Use
of Non-GAAP Financial Measures” below and the reconciliation of these
non-GAAP financial measures to the most directly comparable GAAP
measures in Schedules I through IV attached hereto.

FOURTH QUARTER AND FULL YEAR RESULTS

Revenues decreased $10 million or 1% in thefourth quarter
of 2016 from the year-earlier quarter to $867 million. The stronger U.S.
dollar relative to the British pound had a $22 million adverse impact on
Revenues for the quarter ended December 31, 2016. Excluding the impact
of U.S. dollar/British pound exchange rate changes, Revenues would have
increased 1%, including the benefit of acquisitions.

For the full year 2016, Revenues decreased $27 million or 1% versus the
prior year to $3.08 billion, primarily reflecting declines in Print and
other advertising revenues and Circulation revenues, partially offset by
growth in Digital advertising revenues primarily driven by acquisitions.
The stronger U.S. dollar relative to the British pound had a $46 million
adverse impact on Revenues for the year ended December 31, 2016.
Excluding the impact of U.S. dollar/British pound exchange rate changes,
Revenues would have increased 1%, including the benefit of acquisitions.

Advertising Revenues increased $25 million or 5% in the fourth
quarter of 2016 from the year-earlier quarter to $509 million. The
stronger U.S. dollar relative to the British pound had an $8 million
adverse impact on Advertising revenues for the quarter ended
December 31, 2016. Excluding the impact of U.S. dollar/British pound
exchange rate changes, Advertising revenues would have increased 7%.

For the full year 2016, Advertising revenues increased $57 million or 3%
from the prior year to $1.71 billion, reflecting an increase in Digital
advertising revenues, primarily resulting from the benefit of the Viant
acquisition and, to a lesser extent, growth in Digital advertising
revenues relating to social media platforms and programmatic sales.
Partially offsetting these increases was a decrease in Print and other
advertising revenues attributable to fewer advertising pages sold,
primarily resulting from the continuing trend of advertisers shifting
advertising spending from print to other media, and lower average price
per page of advertising sold. The stronger U.S. dollar relative to the
British pound had a $16 million adverse impact on Advertising revenues
for the year ended December 31, 2016. Excluding the impact of U.S.
dollar/British pound exchange rate changes, Advertising revenues would
have increased 4%.

Circulation Revenues decreased $31 million or 11% in the fourth
quarter of 2016 from the year-earlier quarter to $247 million. The
stronger U.S. dollar relative to the British pound had an $11 million
adverse impact on Circulation revenues for the quarter ended
December 31, 2016. Excluding the impact of U.S. dollar/British pound
exchange rate changes, Circulation revenues would have decreased 7%.

For the full year 2016, Circulation revenues decreased $99 million or 9%
from the prior year to $944 million, primarily due to the continued
shift in consumer preferences from print to digital media, which
resulted in lower domestic Subscription revenues and a decline in both
international and domestic Newsstand revenues. The stronger U.S. dollar
relative to the British pound had a $25 million adverse impact on
Circulation revenues for the year ended December 31, 2016. Excluding the
impact of U.S. dollar/British pound exchange rate changes, Circulation
revenues would have decreased 7%.

Other Revenues, which include marketing and support services
provided to third parties, branded book publishing, events and
licensing, decreased $4 million or 3% in the fourth quarter of 2016 from
the year-earlier quarter to $111 million. The stronger U.S. dollar
relative to the British pound had a $3 million adverse impact on Other
revenues for the quarter ended December 31, 2016. Excluding the impact
of U.S. dollar/British pound exchange rate changes, Other revenues would
have decreased 1%.

For the full year 2016, Other revenues increased $15 million or 4% from
the prior year to $420 million, primarily driven by the benefit of
acquisitions, partially offset by a decline in branded book publishing.
The stronger U.S. dollar relative to the British pound had a $5 million
adverse impact on Other revenues for the year ended December 31, 2016.
Excluding the impact of U.S. dollar/British pound exchange rate changes,
Other revenues would have increased 5%.

Revenues Summary

In millions

Three Months Ended

Year Ended

December 31,

December 31,

2016

2015

% Change

2016

2015

% Change

Print and other advertising

$

343

$

382

(10)%

$

1,200

$

1,324

(9)%

Digital advertising

166

102

63%

512

331

55%

Advertising revenues

509

484

5%

1,712

1,655

3%

Subscription

169

185

(9)%

632

684

(8)%

Newsstand

68

84

(19)%

278

329

(16)%

Other circulation

10

9

11%

34

30

13%

Circulation revenues

247

278

(11)%

944

1,043

(9)%

Other revenues

111

115

(3)%

420

405

4%

Revenues

$

867

$

877

(1)%

$

3,076

$

3,103

(1)%

Costs of Revenues and Selling, General, and Administrative Expenses
decreased $36 million or 5% in the fourth quarter of 2016 from the
year-earlier quarter to $687 million. The stronger U.S. dollar relative
to the British pound had an $18 million favorable impact on Costs of
revenues and Selling, general and administrative expenses for the
quarter ended December 31, 2016. Excluding the impact of U.S.
dollar/British pound exchange rate changes, Costs of revenues and
Selling, general and administrative expenses would have decreased 2%.

For the year ended December 31, 2016, Costs of revenues and Selling,
general and administrative expenses increased $8 million to $2.69
billion from the prior year, primarily driven by costs of operations of
digital investments and growth initiatives. Additionally, included in
Selling, general and administrative expenses for the year ended December
31, 2016 and 2015 were $25 million and $10 million, respectively, of
Other costs related to mergers, acquisitions, investments and
dispositions which have been excluded from our Adjusted OIBDA
calculation. These increases were partially offset by benefits realized
from previously announced cost savings initiatives, real estate savings
and noncash losses recognized in connection with the settlement of a
domestic excess pension plan during the year ended December 31, 2015.
The stronger U.S. dollar relative to the British pound had a $39 million
favorable impact on Costs of revenues and Selling, general and
administrative expenses for the year ended December 31, 2016. Excluding
the impact of U.S. dollar/British pound exchange rate changes, Costs of
revenues and Selling, general and administrative expenses would have
increased 2%.

Restructuring and Severance Costs decreased $146 million or 86%
in the fourth quarter of 2016 from the year-earlier quarter to $23
million. For the full year 2016, Restructuring and severance costs
decreased $114 million or 60% from the prior year to $77 million. The
higher Restructuring and severance costs in 2015 compared to 2016 were
primarily driven by real estate consolidations in the fourth quarter of
2015, including the exit from our former corporate headquarters,
partially offset by costs associated with the realignment program
announced in July 2016 to unify and centralize the editorial,
advertising sales and brand development organizations.

Operating Income (Loss) was income of $122 million and $10
million for the quarters ended December 31, 2016 and 2015, respectively.
The increase in Operating income (loss) in the fourth quarter of 2016
compared to the fourth quarter 2015 was due to higher Restructuring and
severance costs in the year-earlier quarter, which primarily related to
real estate consolidations, including the exit from our former corporate
headquarters.

Operating income (loss) was income of $2 million and a loss of $823
million for the years ended December 31, 2016 and 2015, respectively.
The increase in Operating income (loss) during the year ended
December 31, 2016 compared to the year ended December 31, 2015 was due
to higher Restructuring and severance costs in the prior year, which
primarily related to real estate consolidations, including the exit from
our former corporate headquarters, partially offset by costs associated
with the realignment program announced in July 2016 to unify and
centralize the editorial, advertising sales and brand development
organizations. Operating income for the year ended December 31, 2016
included noncash Asset impairments of $192 million, primarily related to
an impairment of a domestic tradename intangible. Operating loss for the
year ended December 31, 2015 was the result of a noncash Goodwill
impairment charge of $952 million.

Adjusted OIBDA of $182 million for the quarter ended December 31,
2016 represented an increase of $23 million from the year-earlier
quarter primarily due to higher Operating income. Adjusted OIBDA for the
year ended December 31, 2016 of $414 million represented a decrease of
$26 million from the prior year primarily due to lower Revenues and
higher Costs of revenues and Selling, general and administrative
expenses.

Cash Provided By (Used In) Operations increased $62 million in
the fourth quarter of 2016 from the year-earlier quarter to $89 million.
For the full year 2016, Cash provided by (used in) operations increased
$41 million or 27% from the prior year to $195 million.

Free Cash Flow was an inflow of $66 million in the fourth quarter
of 2016 versus an outflow of $53 million for the year-earlier quarter,
primarily reflecting improvements in Cash provided by (used in)
operations as well as lower Capital expenditures. For the full year
2016, Free cash flow was an inflow of $94 million versus an outflow of
$58 million from the prior year, primarily reflecting lower capital
expenditures.

On February 16, 2017, our Board of Directors declared a dividend of
$0.19 per common share to stockholders of record as of the close of
business on February 28, 2017, payable on March 15, 2017.

During the year ended December 31, 2016, we repurchased $50 million in
aggregate principal amount of our 5.75% Senior Notes at a discounted
price together with accrued interest for a total of $46 million. As a
result of the repurchase, we recognized a pretax gain on extinguishment
of debt of $4 million. During the fourth quarter of 2016, we repurchased
0.39 million shares of our common stock at a weighted average price of
$13.48 per common share. During the year ended December 31, 2016, we
repurchased approximately 7.72 million shares of our common stock at a
weighted average price of $14.76 per share. Such repurchases were made
in accordance with our Board of Directors' authorizations in November
2015.

OUTLOOK

Our Outlook for 2017 is as follows:

$ in millions

Full Year 2017 Outlook

2016 Actual(1)

Range(1)

Revenues

(1%)

~$3,000

Operating income (loss)

$2

$273

to

$287

Adjusted OIBDA

$414

At least $400 with a plan

to be flat year-over-year

Capital expenditures

$101

$80

to

$90

(1)

The Full Year 2016 results averaged a USD to GBP exchange rate of
1.3. The Full Year 2017 Outlook assumes USD to GBP exchange rate
of 1.25.

The Company’s Adjusted OIBDA is a non-GAAP financial measure. See “Use
of Non-GAAP Financial Measures” below and the reconciliation of this
non-GAAP financial measure to the most directly comparable GAAP measure
in Schedule V attached hereto.

CONFERENCE CALL WEBCAST

The Company’s conference call can be heard live at 8:30 am E.T. on
Thursday, February 16, 2017. To access a live audio webcast of the
conference call, visit the Events and Presentations section of
invest.timeinc.com. The earnings press release and management
presentation will be available on our website at invest.timeinc.com.

USE OF NON-GAAP FINANCIAL MEASURES

Time Inc. utilizes Operating income (loss) excluding Depreciation and
Amortization of intangible assets ("OIBDA"), Adjusted OIBDA, Adjusted
Net income (loss), Adjusted Diluted EPS and Free cash flow, among other
measures, to evaluate the performance of its business and its liquidity.
We believe that the presentation of these measures helps investors to
analyze underlying trends in our business and to evaluate the
performance of our business both on an absolute basis and relative to
our peers and the broader market. We believe that these measures provide
useful information to both management and investors by excluding certain
items that may not be indicative of our core operating results and
operational strength of our business and help investors evaluate our
liquidity and our ability to service our debt.

Some limitations of OIBDA, Adjusted OIBDA, Adjusted Net income (loss),
Adjusted Diluted EPS and Free cash flow are that they do not reflect
certain charges that affect the operating results of the Company’s
business and they involve judgment as to whether items affect
fundamental operating performance.

A general limitation of these measures is that they are not prepared in
accordance with U.S. generally accepted accounting principles ("GAAP")
and may not be comparable to similarly titled measures of other
companies due to differences in methods of calculation and excluded
items. OIBDA, Adjusted OIBDA, Adjusted Net income (loss), Adjusted
Diluted EPS and Free cash flow should be considered in addition to, not
as a substitute for, the Company’s Operating income (loss), Net income
(loss), Diluted net income (loss) per common share and various cash flow
measures (e.g., Cash provided by (used in) operations), as well as other
measures of financial performance and liquidity reported in accordance
with GAAP.

In addition, this earnings release includes comparisons that exclude the
impacts of foreign currency exchange rate changes. These comparisons,
which are non-GAAP measures, are calculated by assuming constant foreign
currency exchange rates used for translation based on the rates in
effect for the comparable prior-year period. In order to compute our
constant currency results, we multiply or divide, as appropriate, our
current year U.S. dollar results by the current year average foreign
exchange rates and then multiply or divide, as appropriate, those
amounts by the prior year average foreign exchange rates. We believe
this provides useful supplemental information regarding our results of
operations, consistent with how we evaluate our own performance.

ABOUT TIME INC.

Time Inc. (NYSE:TIME) is a leading content company that engages over 150
million consumers every month through our portfolio of premium brands
across platforms. By combining our distinctive content with our
proprietary data and people-based targeting, we offer highly
differentiated end-to-end solutions to marketers across the multimedia
landscape. Our influential brands include People, Time, Fortune, Sports
Illustrated, InStyle, Real Simple and Southern Living, as well as
approximately 50 diverse titles in the United Kingdom. Time Inc. has
been extending the power of our brands through various acquisitions
and investments, including Viant, an advertising technology firm with a
specialized people-based marketing platform; The Foundry, Time Inc.’s
creative lab and content studio; and the People Entertainment Weekly
Network (PEN). The Company is also home to celebrated events, such as
the Time 100, Fortune Most Powerful Women, People’s Sexiest Man Alive,
Sports Illustrated’s Sportsperson of the Year, the Essence Festival and
the Food & Wine Classic in Aspen.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
are based on management’s current expectations or beliefs, and are
subject to uncertainty and changes in circumstances. Actual results may
vary materially from those expressed or implied by the statements herein
due to changes in economic, business, competitive, technological,
strategic and/or regulatory factors and other factors affecting the
operation of Time Inc.’s businesses. More detailed information about
these factors may be found in filings by Time Inc. with the Securities
and Exchange Commission, including its most recent Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q. Time Inc. is under
no obligation to, and expressly disclaims any such obligation to, update
or alter its forward-looking statements, whether as a result of new
information, future events, or otherwise.

TIME INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share amounts)

December 31,

December 31,

2016

2015

ASSETS

Current assets

Cash and cash equivalents

$

296

$

651

Short-term investments

40

60

Receivables, less allowances of $203 and $248 at December 31, 2016
and 2015,

respectively

543

484

Inventories, net of reserves

31

35

Prepaid expenses and other current assets

110

187

Total current assets

1,020

1,417

Property, plant and equipment, net

304

267

Intangible assets, net

846

1,046

Goodwill

2,069

2,038

Other assets

66

116

Total assets

$

4,305

$

4,884

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued liabilities

$

598

$

683

Deferred revenue

403

436

Current portion of long-term debt

7

7

Total current liabilities

1,008

1,126

Long-term debt

1,233

1,286

Deferred tax liabilities

210

242

Deferred revenue

86

89

Other noncurrent liabilities

328

332

Stockholders' equity

Common stock, $0.01 par value, 400 million shares authorized;
98.95 million and 106.03

million shares issued and outstanding at December 31, 2016 and
2015, respectively

(Gain) loss on operating assets, net primarily reflects the
recognition of the deferred gain from the sale-leaseback of the Blue
Fin building and a gain on sale of certain of our titles in 2016 and
the gain from the sale-leaseback of the Blue Fin Building that was
completed in the fourth quarter of 2015.

(4)

Other costs related to mergers, acquisitions, investments and
dispositions during the periods presented are included within
Selling, general and administrative expenses within the Statements
of Operations.

(Gain) loss on operating assets, net primarily reflects the
recognition of the deferred gain from the sale-leaseback of the Blue
Fin building and a gain on sale of certain of our titles in 2016 and
the gain from the sale-leaseback of the Blue Fin Building that was
completed in the fourth quarter of 2015.

(3)

Bargain purchase (gain) relates to the acquisition of certain assets
of Viant in the first quarter of 2016.

(4)

(Gain) loss on extinguishment of debt in connection with repurchases
of our Senior Notes are included within Other (income) expense, net
on the Statements of Operations.

(5)

Other costs related to mergers, acquisitions, investments and
dispositions during the periods presented are included within
Selling, general and administrative expenses within the Statements
of Operations.

(6)

Adjusted Net income (loss) is defined as Net income (loss) adjusted
for impairments of Goodwill, intangible assets, fixed assets and
investments; Restructuring and severance costs; Gain (loss) on
operating and/or non-operating assets; Pension
settlements/curtailments; Bargain purchase (gain); (Gain) loss on
extinguishment of debt; and Other costs related to mergers,
acquisitions, investments and dispositions; as well as the impact of
income taxes on the above items.

(Gain) loss on operating assets, net primarily reflects the
recognition of the deferred gain from the sale-leaseback of the Blue
Fin building and a gain on sale of certain of our titles in 2016 and
the gain from the sale-leaseback of the Blue Fin Building that was
completed in the fourth quarter of 2015.

(3)

Bargain purchase (gain) relates to the acquisition of certain assets
of Viant in the first quarter of 2016.

(4)

(Gain) loss on extinguishment of debt in connection with repurchases
of our Senior Notes are included within Other (income) expense, net
on the Statements of Operations.

(5)

Other costs related to mergers, acquisitions, investments and
dispositions during the periods presented are included within
Selling, general and administrative expenses within the Statements
of Operations.

(6)

Adjusted Diluted EPS is defined as Diluted EPS adjusted for
impairments of Goodwill, intangible assets, fixed assets and
investments; Restructuring and severance costs; Gain (loss) on
operating and/or non-operating assets; Pension
settlements/curtailments; Bargain purchase (gain); (Gain) loss on
extinguishment of debt; and Other costs related to mergers,
acquisitions, investments and dispositions; as well as the impact of
income taxes on the above items.

(7)

For periods in which we were in a net loss position, we have used
the expected diluted shares in the calculation of Adjusted Diluted
EPS as if we were in a net income position, without giving effect to
the impact of participating securities.

Free cash flow is defined as Cash provided by (used in) operations,
less Capital expenditures. Capital expenditures for the three months
ended and year ended December 31, 2016 reflect lower capital
spending due to the completion of the relocation of our corporate
headquarters and other properties in 2015.